There will be plenty of
Treasury Wine Estates
(TWE) shareholders who feel like a drink on Tuesday after the company revealed that private equity bid Kohlberg Kravis Roberts had offered $4.70 to buy the company last month.

The company, the maker of Penfolds, has been a constant target of takeover talks for months, playing down reports that both Constellation Brands and premium beverage group Pernod Ricard were eyeing off its troubled US business.

KKR made an indicative $4.70 cash bid for the company, one that would imply a value of $3.05 billion, but which was rejected by TWE on April 16. While both sides agreed at the time to keep the engagement confidential, TWE is now alleging KKR broke the terms of that confidentiality after speaking to “one or more" of its investors.

Citing the need to ensure there is an “informed market", chief executive
Mike Clarke
has now gone public. It will come as a bit of a bombshell to TWE investors who are divided on whether the company should sell off the US operations or have faith in Clarke’s promise to turn the company around.

The non-believers will not be happy.

TWE shares last traded at $4.07. On the day the company rejected the takeover approach, they were trading at $3.70 so the proposed $4.70 would have represented a 27 per cent premium.

Treasury has also announced a cost-cutting programme and plans to ramp up its consumer market spending. It is targeting $35 million in cost savings in financial 2015, which will involve job cuts.

It is still early days for Clarke who has only been in the top job for seven weeks but he faces an uphill battle as the company seeks to restore investor confidence following the write-downs on the US business which claimed the scalp of former chief
David Dearie
.